Scott Galloway Challenges SpaceX Valuation, Warning Shares Could Drop 80%

Academic and market commentator Scott Galloway has issued a sharp critique of SpaceX’s market valuation, asserting that Wall Street has fundamentally miscalculated the rocket and satellite provider's financial standing. Galloway argued during a recent podcast appearance that shares of SpaceX are worth between $10 and $30 apiece, representing a potential decline of up to 80% from its current trading level of $148, as detailed in reporting first published by Yahoo Finance. Despite a market capitalization hovering at $1.91 trillion, Galloway maintained that the company remains drastically overvalued.

SpaceX completed its initial public offering on the Nasdaq in June 2026, raising more than $75 billion and entering the public markets at a valuation near $1.8 trillion based on an initial price of $135 per share. Following the listing, the stock experienced substantial volatility, climbing to a high of $225 before plunging more than 50% to a low of $105. Over the past two weeks, the equity has rebounded to trade above its original offer price.

According to Galloway, the stock's elevated trading price is driven by structural market mechanics rather than corporate fundamentals. He highlighted that only 4% to 5% of SpaceX’s shares were made available in the public float immediately after the IPO, creating an artificial supply constraint. Additionally, mandatory buying by index funds following the company's inclusion in the Nasdaq 100 buoyed demand. Galloway also pointed to a $25 billion bond issuance completed less than two weeks after the public debut—despite SpaceX holding over $100 billion in cash—as evidence that the business is effectively operating as an artificial intelligence infrastructure enterprise disguised as a space venture. In remarks reported by Business Insider, Galloway noted that Chief Executive Officer Elon Musk may be remembered less as a physical engineer than as a master of financial engineering.

Financial records compiled by Fiscal.ai show that while SpaceX expanded its top-line revenue from $10.4 billion in 2023 to $23 billion over the trailing 12-month period, profitability has eroded. The enterprise posted net losses of $4.6 billion in 2023 and $4.9 billion in 2025, with trailing 12-month net losses rising to $8.2 billion. Over the same trailing period, SpaceX recorded an operating margin of negative 16.2%.

The widening losses stem significantly from aggressive capital expenditures aimed at expanding AI compute capabilities. Over the trailing 12-month period, SpaceX reported $41.1 billion in capital spending, contributing to a negative free cash flow burn of $31.2 billion. During the company's second-quarter earnings call, Chief Financial Officer Bret Johnsen defended the capital allocation, stating that AI compute investments generate a full payback in under one year. However, Johnsen acknowledged that this spending functions more like cost of goods sold than traditional capital investments, as compute infrastructure requires constant replacement to sustain growth rates.

Galloway is not alone in questioning the company's valuation. George Noble, former manager of the Fidelity Overseas Fund, told Business Insider that SpaceX and Tesla rank among the premier short targets in equity markets. Noble predicted that SpaceX shares could fall by as much as 50% by the end of the year and eventually settle near $30 per share, an 80% retrenchment. He cautioned that passive retail investors holding target-date and retirement funds now implicitly own a $2 trillion entity priced at approximately 90 times annual revenues.

Consensus data compiled by Tikr.com indicates that Wall Street analysts expect SpaceX’s revenue to rise from $44.63 billion in 2026 to $388 billion by 2030. Achieving those targets, however, is projected to require a cumulative free cash outflow of roughly $280 billion through 2030, likely forcing the business to issue additional equity or debt that would dilute existing equity holders. Despite these capital requirements, broader Wall Street sentiment remains overwhelmingly bullish: out of 34 analysts tracking the stock, 25 maintain "Buy" ratings, six recommend "Hold," and three advise "Sell," with an average price target of $228, representing a 52% upside.

Despite his bearish valuation model, Galloway stated that he does not plan to initiate a short position against SpaceX. He warned that Musk's capacity to rally market enthusiasm around unproven initiatives—such as hypothetical lunar quantum computing projects—could spark speculative buying spikes independent of financial metrics. Consequently, Galloway noted that he avoids trading the stock directly, leaving a persistent divide between fundamental balance sheet metrics and market pricing.